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The Self-Directed IRA Real Estate Rules

Ever since the advent of self-directed IRAs, the IRS rules have always permitted you to engage in almost any type of real estate investment, aside generally from any investment involving a disqualified person.

The advantage of using retirement funds to make real estate purchases is that all the income and gains generated by the real estate investment would not be subject to any tax or penalty. Instead of paying tax on the returns of a real estate investment, tax is paid only at a later date, leaving the real estate investment to grow unhindered. Generally, self-directed IRA real estate investments are usually made when a person is earning higher income and is taxed at a higher tax rate. Withdrawals are made from an investment account when a person is earning little or no income and is taxed at a lower rate.

With a “checkbook control” self-directed IRA LLC, making a real estate investment is as simple as writing a check. No longer will you have to pay high IRA custodian fees or have to endure long delays and risk losing your deal as a result of having to have every aspect of your real estate transaction pre-approved by the custodian. The Self-Directed IRA LLC is an IRS approved structure that allows you to use your retirement funds to make real estate and other investments tax-deferred and without custodian consent. The Self-Directed IRA involves the establishment of a limited liability company (“LLC”) that is owned by the IRA (care of the IRA Administrator and managed by you or any third-party). As manager of the IRA LLC, you will have control over the IRA assets and be able to make investments directly from your LLC bank account, which can be opened at any local bank. If there is a real estate investment you want to make – simply write a check or wire the funds straight from your IRA LLC bank account. Don’t waste time and money relying on a custodian to be involved in every aspect of your real estate transaction. The IRS gives you the ability to have more control and authority over your IRA assets.

A Self-Directed IRA real estate “Checkbook Control” structure offers you the ability to use your retirement funds to make almost any type of investment including real estate on their own without requiring the consent of any custodian without paying tax or penalty.

To learn more about the self-directed IRA real estate structure, please contact a tax expert at 800-472-0646.

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Posted in Self-Directed IRA